NCPA - National Center for Policy Analysis

Obama Spends Billions, Only Adds to College Costs

November 4, 2010

The Obama administration has doled out a record amount of college loans this year to help students cope with the affordability crisis in college tuition.  Meanwhile, college tuition has become yet more unaffordable, says James A. Bacon, author of Boomergeddon.

  • Uncle Sam handed out $28.2 billion in Pell grants to students in the 2009-2010 school year, almost $10 billion more than the previous year.
  • Since taking office, President Obama has increased spending on student aid by nearly 50 percent, to $145 billion, the Wall Street Journal reports.
  • From 2000 to 2010, tuition and fees at four-year institutions increased an average of 5.6 percent faster than inflation.
  • Apologists for higher education blame cutbacks in state appropriations, which declined 5 percent in 2009-2010.

Higher education has been one of the great growth industries of the 2000s. According to the 2009 Digest of Education Statistics, published by the National Center for Education Statistics, which lists data from the 2003-2004 to 2006-2007 school years, operating expenditures for all U.S. institutions of higher education increased 16 percent (in real, inflation-adjusted dollars) over that three-year span.

Where did the money go?  Here are the spending categories that enjoyed the largest rates of increase:

  • Instructional wages and salaries: 16.8 percent.
  • Auxiliary enterprises: 17.8 percent.
  • Institutional support: 19 percent.
  • Academic support: 19.9 percent.
  • Student services: 20.6 percent.
  • Operations and maintenance: 25.4 percent.

In other words, expanded college loans are paying for the growth of higher-ed bureaucracies.  The only way to make higher education more affordable over the long haul is to demand greater cost efficiency from our colleges and universities.  But as long as the federal government keeps the money spigot flowing, higher education can evade accountability, says Bacon.

Source: James A. Bacon, "Obama Spends Billions, Only Adds to College Costs," Washington Times, October 29, 2010.

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